Daily.co has just raised $4.6M video chat API service

  • The digital video startups are having a great year so far.
  • A new startup, Daily.co has raised new funding to increase the usage of its product.
  • The company raised $4.6 million in a new funding round led by Freestyle.
Daily.co raises $4.6M
https://www.flickr.com/photos/129002025@N07/

API-powered startups are having a great year with the exit of Plaid to visa fresh in our mind. Recently, a startup, Currency Cloud, raised  $80M for its cross border payment APIs. Moreover, the digital video startups are having a great year. The reason is that the vast majority of people are staying at home, and the work is shifting to a remote landscape. However, a new startup,  Daily.co, has raised new capital and increased the usage of its product.

In layman terms, Daily.co has an API that lets customers integrate video chat into their products.

Today, Daily.co banked $4.6 million in a funding round led by Jenny Lefcourt from Freestyle. The round closed back in January, but it was announced this week.

Jenny Lefcourt
https://www.flickr.com/photos/cmichel67/

However, Freestyle wasn’t alone in the round. Several investors funded the round Angel investors and several institutional investors. Three previous investors also took part in the round, like Root, TenOneTen, and Haystack.

If there were no lead investor in the round, it would have felt like a unicorn party round. Previously, Daily.co raised $2.6 million in 2016, the co-founder, Kwindla Hiltman Kramer, said in an interview.

Daily.co path to API service wasn’t easy. It’s the first startup that uses hardware products to fund itself.

Kramer mentioned that his company built the video conferencing hardware box for just a few $100 million. The income obtained by the boxes helped the startup go on with its plan of building a powered API.
The firm stated that handling non-trivial minutes through the product was an important mechanism.

Daily.co’s complete thesis is now apparent. However, when the company started in 2015, things weren’t quite obvious.
Several market trends make the company’s original vision quite clear, like growing device power, fast internet penetration, and taking on the WebRTC products. As the market has matured, Daily.co has become a major player in the market.

Daily.co charges some price for its services, like usage costs and a small SaaS fee. Kramer mentioned that the margins of the firm are quite attractive, and there are several ways to control the bandwidth cost. Therefore, the startup should have multiple SaaS value.

Daily.co is getting a lot of attention from several larger companies. However, the clients would require hand holding, which means a larger staff. It will be interesting to note how much Daily.co will increase in value in 2020, while the economy goes in a negative territory

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